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The Strategic Role of HR Operating Partners in Private Equity

  • Writer: Jim Tolbert
    Jim Tolbert
  • a few seconds ago
  • 3 min read

Category: Private Equity, Human Capital, Leadership


Audience: Private Equity Investors, Portfolio Company Executives, HR Operating Partners


Overview: HR Operating Partners play a pivotal role in private equity by optimizing talent, leadership, and organizational strategy to maximize investment outcomes.


Read Time: 3 minutes


Leadership effectiveness is paramount in private equity -  70% of executives identify it as the top value-creation lever.


However, high CEO turnover and failed leadership can severely erode returns, emphasizing the need for strategic human capital management.


Key Responsibilities of HR Operating Partners


HR Operating Partners (HR OPs) are the bridge between investors and portfolio companies' leadership teams - ensuring people strategies align with business objectives and drive measurable results.


HR-OPs don’t only oversee talent - they shape investment outcomes. 


By embedding leadership and human capital strategies into the investment lifecycle, HR OPs help maximize EBITDA growth, accelerate value creation, and ensure long-term stability for portfolio companies.


Their responsibilities extend across the entire investment lifecycle - from pre-deal diligence to post-acquisition integration and long-term value creation.


Their responsibilities may include:


  • Talent Management: Overseeing talent acquisition, leadership development, and succession planning to ensure portfolio companies have the right teams to execute their strategies


  • Organizational Development: Facilitating transformations, structuring teams for rapid scaling, and fostering cultures that drive innovation and agility


  • Board Participation: Acting as advisors on portfolio company boards, providing insights on leadership decisions, executive compensation, and strategic workforce planning


  • Strategic Planning: Partnering with CEOs and executives to embed human capital considerations into investment theses and operational strategies


  • Performance Review & Reporting: Establishing robust talent metrics, monitoring leadership effectiveness, and ensuring portfolio companies meet performance expectations.


Essential Skills for HR Operating Partners

Executives climbing cliff to yellow flag goal on top - helping each other out along the way

Success as an HR OP requires a unique blend of HR expertise, business acumen, and interpersonal skills. 


Key attributes include:


  • Deep HR & Organizational Development Knowledge: Expertise in workforce strategy, leadership assessment, and cultural transformation


  • Investor Mindset: Understanding financial levers and aligning HR initiatives with value-creation goals


  • Interpersonal Acumen: Strong self-awareness, emotional intelligence, and ability to navigate complex leadership dynamics


  • Adaptability: The ability to tailor strategies to different portfolio companies, industries, and investment horizons


  • Stakeholder Management: Building trust with investors, executives, and boards to drive alignment and execution.


Compensation & Incentives


HR Operating Partners are typically compensated through a mix of base salary, performance-based bonuses, and, in some cases, carried interest - ensuring their incentives align with portfolio company success. 


This model reflects the growing recognition that human capital is as critical to investment returns as financial performance.


The Future of HR Operating Partners in Private Equity


As leadership becomes a central performance metric in private equity, firms that fail to integrate human capital strategies into their investment thesis will fall behind. 


The next few years will see HR OPs play an even more critical role—improving leadership alignment and ensuring people strategy becomes as measurable as financial performance.


For investors and portfolio executives looking to elevate their approach to human capital, I welcome the opportunity to connect.

Schedule a time to chat - https://calendly.com/jimetolbert/30min.


Jim Tolbert is the Managing Director at the Performance Leadership Learning Lab (PL3). His experience includes education, finance, private equity, and leadership development. 


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